The government would not accept any requests from Eskom to extend the December 2013 deadline for its Medupi coal-fired station to feed power to the grid for the first time.
Public Enterprises Minister Malusi Gigaba told a briefing attended by Eskom chief executive Brian Dames on Friday that the utility “must simply do more and better to manage the contractors [and] the project itself”.
“I am adamant that [the deadline] will not be changed without strict penalties being imposed on contractors should they fail to meet their obligation. I’m unprepared to accept any review for the delivery schedule,” he said.
Gigaba announced that the workers’ strike at the Medupi construction site was over after he had intervened to bring the parties back to the negotiation table. He said the technical challenges that had also played a major role in the project’s delay were now being addressed. He had received technical plans from contractors on how they planned to meet the December deadline.
Initially, Medupi was supposed to make its first contribution to the grid at the end of last year, but the deadline has since been revised twice.
Dames heads Eskom during a difficult period as the national regulator only approved half of the tariff hike it wanted.
He said Eskom fully intended to keep the lights on to keep the economy growing.
He said Eskom had made a sound application and the fact that the utility did not get the increase it applied for raised questions about what it could and could not do from now on.
He said very difficult decisions would have to be made because Eskom needed to fund the maintenance of aging infrastructure and was dealing with the consequences of 20 years of underinvestment.
Dames said it was important for the utility to be profitable so that it could pay back its debt obligations.
“Currently our profit doesn’t even cover our interest bill,” he said. – Londiwe Buthelezi